Former German Finance Minister Peer Steinbrück, who led that country's push for tougher European and international hedge fund regulations, will seek its highest office in next year's election.

Steinbrück was formally nominated to challenge Chancellor Angela Merkel by Germany's opposition Social Democrats this weekend. He served as finance minister under Merkel from 2005 through 2009.

During his time in office, Steinbrück was often the public face of Germany's push to crack down on hedge funds and private equity funds. But he failed to convince his colleagues in Britain, the EU and the U.S. to follow his lead; Germany has become somewhat more accommodating to hedge funds—on the international stage—since he left office.

"The financial crisis showed that things have got out of balance in Germany, in Europe and in our society," Steinbrück told his party.

"Germany needs more 'we' and less 'I,'" he added.

Steinbrück's chances of unseating Merkel, who will seek a third term in September's poll, are murky at best. Merkel's center-right Christian Democratic Union and its Bavarian allies have a roughly 10-point lead on the SPD in the polls. But its current coalition partners are way down in the same polls, at levels likely to seem them tossed out of the Bundestag entirely, while the SPD's allies, the Greens, are polling above 10%.

Steinbrück has vowed not to serve in a "grand coalition" with the CDU and CSU, as he did as finance minister.

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